This will not be the last you will hear of this onerous major tax, because it is crucial to Obama's plans for raising money through taxes as he reorders the American economy. If this passes, the future taxation will be hidden in just about everything you need and use, but especially in energy costs, and anything that generates carbon output. And as a regressive tax, it hits the less well-off people harder than it does those making over $250,000 a year, which was Obama's cut-off for "no new taxes". Be afraid, be very afraid.
Cap and Tax Collapse
Congress balks at one more bad Obama idea.
Please pass Al Gore a Valium -- and better make it a double -- because his cap-and-trade dreams just took a dive in the U.S. Senate. In a vote late Wednesday, no fewer than 26 Democrats joined all 41 Republicans to insist that any new cap and tax on carbon energy would require at least 60 votes.
Tennessee Republican Lamar Alexander called it "the biggest vote of the year" so far, and he's right. This means Majority Leader Harry Reid can't jam cap and tax through as part of this year's budget resolution with a bare majority of 50 Senators. More broadly, it's a signal that California and East Coast Democrats won't be able to sock it to coal and manufacturing-heavy Midwestern states without a fight. Senators voting in favor of the 60-vote rule included liberals from Wisconsin, Michigan and West Virginia. Now look for Team Obama to attempt to impose cap and tax the non-democratic way, via regulation that hits business and local governments with such heavy costs that they beg Congress for a less-harmful version.
Though the press corps has barely noticed, this means that two of President Obama's most economically destructive priorities have taken major hits in the last two weeks. The cap-and-tax collapse follows Pennsylvania Republican Arlen Specter's decision to oppose Big Labor's attempt to eliminate secret ballots in union organizing elections. If Mr. Specter holds firm, and as swing state Democrats also look for cover, Republicans will be able to prevail on a filibuster.
Opponents can't get complacent because the left will regroup, and the media-liberal activist consortium will start to get nasty with dissenters. But for now these are major victories for the U.S. economy, and we suspect they are also helping the stock market rally.
The most important remaining fight this year is over health care. Democrats seem intent on trying to plow that monumental change through with only 50 votes, even as they negotiate to bring along some Republicans. We hope these Republicans understand that a new health-care "public option" -- a form of Medicare for all Americans -- guarantees that the 17% of GDP represented by the health-care industry will be entirely government-run within a few years. This is precisely Mr. Obama's long-term goal, though he doesn't want to say it publicly.
If Republicans acquiesce, they will spend the rest of their days in public life raising taxes to pay for liabilities that will grow into the trillions of dollars. GOP leaders need to get out of the backrooms and start the same kind of public-education campaign on state-run health care that has helped to stall cap and tax and coercive unionization.